COMMERCIAL LEASE
This lease, dated for reference purposes only this 28 day of May, 1998, is
made between NINE-C CORPORATION (the "Landlord") and Penn Octane Corporation &
X.X.Xxxxxxx, an individual (the "Ten-ant").
1. PREMISES.
1.01 Description. Landlord hereby leases to Tenant and Tenant hires from
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Landlord on the terms, covenants and conditions set forth herein, those premises
specifically known as Suite 240 designated and identified by crosshatching on
Exhibit "A" attached hereto, (the "Leased Premises"), and incorporated by
reference herein. The Leased Premises, approximately 1325 square feet of usable
space, and approximately 1559 square feet of rentable space (by BOMA Modified
Standards), is located at 000 Xxxxxxxx Xxxxx-xxxx, Xxxxxxx Xxxx, Xxxxxxx-xxx
(the "Building"). The Building is a part of a commercial project which includes
the Building, an adjacent parking lot and parking structure and the underlying
real property (the "Project").
1.02 Confirmation of Terms. Within thirty (30) days after Landlord
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delivers a fully executed copy of this Lease to Tenant, Tenant's architect may,
at Tenant's expense, verify the rentable area contained in the Leased Premises.
The term "rentable area" as used in this Lease means the rentable area as
determined by the most recent version of the BOMA (Building Owners and Managers
Association International) American National Standard. If tenant's verification
of the rentable area differs from the rentable area specified in Paragraph 1.01,
then the parties shall immediately execute "Confirmation of Lease Terms" to
confirm the rentable area, the Base Rent, Tenant's Pro Rata Share and other
changes that are based on the rentable area of the Premises.
2. BASE RENT.
2.01 Tenant agrees to pay Landlord as base rent (Base Rent), without
notice, demand, deduction, or offset, the monthly sum of $4910.85 for the first
12 months, adjusted as provided in Paragraph 2.03 for all months thereafter, in
advance on or before the first day of each and every successive calendar month
during the term hereof, except that last month's deposit shall be paid upon
execution hereof. Credit will be given for Tenant's current deposit. The rent
shall commence on the First day of July, 1998 (the "Commencement Date"). All
payments to Landlord under this Lease shall be paid to Landlord at the address
for notice set forth in paragraph 32.15, or at such other address provided to
Tenant by Landlord in writing from time to time.
2.02 Rent for any period which is for less than one month shall be a
prorated portion of the monthly rental based upon a thirty (30) day month.
Tenant acknowledges that late payment by Tenant to Landlord of rent or other
sums due hereunder will cause Landlord to incur certain costs not contemplated
by this Lease, the exact amount of which would be extremely difficult and
impractical to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any trust deed covering the Leased Premises.
Therefore, in the event Tenant shall fail to pay any installments of rent or any
sum due hereunder within five (5) days after receiving notice of such
delinquency, Tenant shall pay to Landlord as additional rent a late charge equal
to TEN percent (10%) of each such installment or other sum. A $15.00 charge
will be paid by the Tenant to the Landlord for each returned check, in addition
to the late charge.
2.03 INTENTIIONALLY OMMITTED
3. PROJECT OPERATING COSTS.
3.01(a) In order that the Rent payable during the Term reflect any
increase in Project Operating Costs (described below), Tenant agrees to pay to
Landlord as Rent, Tenant's Proportionate Share (defined in Paragraph 3.02) of
all increases in costs, expenses and obligations attributable to the Project and
its operation, all as provided below.
(b) If, during any Calendar year during the Term, Project Operating
Costs exceed the Project Operating Costs for the calandar year of the Occupancy,
Tenant shall pay to Landlord, in addition to the Base Rent and all of the
payments due under this Lease, an amount equal to Tenant's Proportionate Share
of such excess Project Operating Costs in accordance with the provisions of this
Paragraph 3.01(b).
(c) The term "Project Operating Costs" shall include all those items
described in the following subparagraphs (1) and (2).
(1) All taxes, assessments, water and sewer charges and other similar
governmental charges levied on or attributable to the Building or Project as a
whole or their operation, including without limitation, (i) real property taxes
or assessments levied or assessed against the Building or Project as a whole,
and (ii) assessments or charges levied or assessed against the Building or
Project as a whole by any redevelopment agency; but excluding any tax measured
by gross rentals received from the leasing of the Premises, Building or Project.
(2) Operating costs incurred by Landlord in maintaining and operating the
Building and Project, including without limitation the following: costs of (i)
utilities; (ii) supplies; (iii) insurance (including public liability, property
damage, earthquake, and fire and extended coverage insurance for the full
replacement costs of the Building and Project as required by Landlord or its
lenders for the Project; (iv) services of independent contractors; (v)
compensation (including employment taxes and fringe benefits) of all persons who
perform duties connected with the operation, maintenance, repair or overhaul of
the Building or Project, and the HVAC system, equipment, improve-ments and
facilities located within the Project, including without limitation engineers,
janitors, painters, floor waxers, window washers, security and parking
personnel, landscapers and gardeners (but excluding persons performing services
not uniformly available to or performed for substantially all Building or
Project tenants); (vi) operation and maintenance of a room for delivery and
distribu-tion of mail to tenants of the Building or Project as required by the
U.S. Postal Service (including, without limitation, an amount equal to the fair
market rental value of the mail room premises); (vii) management of the Building
or Project, whether managed by Landlord or an independent contractor (including,
without limita-tion, an amount equal to the fair market value of any on-site
manager's office, but excluding any commission or fee for leasing or collecting
rents); (viii) rental expenses for (or a reasonable depreciation allowance on)
personal property used in the main-tenance, operation or repair of the Building
or Project: (ix) costs, expenditures or charges (whether capitalized or not)
required by any governmental or quasi-governmental authority; (x) amortization
of capital expenses (including financing costs) (1) required for the Building as
a whole by a governmental entity for energy conservation or life safety
purposes, or (2) made by Landlord to reduce Project Operating Costs; and (xi)
any other costs or expenses incurred by Landlord under this Lease and not
otherwise reimbursed by tenants of the Project.
(3) Project Operating Costs shall not include costs or expenses only for
the benefit of other tenants.
(d) Tenant's Proportionate Share of Project Operating Costs shall be
payable by Tenant to Landlord as follows:
(1) Beginning with the second year of the term and for each year
thereafter ("Comparison Year"), Tenant shall pay Landlord an amount equal to
Tenant's Proportionate Share of the Project Operating Costs incurred by Landlord
in the Comparison Year which exceeds the total amount of Project Operating Costs
payable by Landlord for the first year of the term. This excess is referred to
as the "Excess Expenses."
(2) To provide for current payments of Excess Expenses, Tenant shall,
at landlord's request, pay as additional rent during each Comparison Year, an
amount equal to Tenant's Proportionate Share of the Excess Expenses payable
during such Comparison Year, as estimated by Landlord from time to time. Such
payments shall be made in monthly installments, commencing on the first day of
the month following the month in which Landlord notifies Tenant of the amount it
is to pay hereunder and continuing until the first day of the month following
the month in which Landlord gives Tenant a new notice of estimated Excess
Expenses. It is the intention hereunder to estimate from time to time the
amount of the Excess Expenses for each Comparison Year and Tenant's
Proportionate Share thereof, and then to make an adjustment in the following
year based on the actual Excess Expenses incurred for that Comparison Year.
(e) On or before the 90th day of each Comparison Year after the first
Comparison Year (or as soon thereafter as is practical), Landlord shall deliver
to Tenant a statement setting forth Tenant's Proportionate Share of the Excess
Expenses for the preceding Comparison Year. If Tenant's Proportionate Share of
the actual Excess Expenses for the previous Comparison Year exceeds the total of
the estimated monthly payments made by Tenant for such year, Tenant shall pay
Landlord the amount of the deficiency within ten (10) days of the receipt of the
statement. If such total exceeds Tenant's Proportionate Share of the actual
Excess Expenses for such Comparison Year, then Landlord shall credit against
Tenant's next ensuing monthly installment(s) of additional rent an amount equal
to the difference until the credit is exhausted. If a credit is due from
Landlord on the Expiration Date, Landlord shall pay Tenant the amount of the
credit. The obligations of Tenant and Landlord to make payments required under
this Paragraph 3.01 shall survive the Expiration Date.
(f) Tenant's Proportionate Share of Excess Expenses in any Comparison
Year having less than 365 days shall be appropriate-ly prorated.
(g) If any dispute arises as to the amount of any additional rent due
hereunder, Tenant shall have the right after reasonable notice and at reasonable
times to inspect Landlord's accounting records at Landlord's accounting office
and, if after such inspection Tenant still disputes the amount of additional
rent owed, Landlord and Tenant shall refer the dispute to an independent
certified public accountant selected by them for certification of the proper
amount. Such accountant's certification of the amount and direction as to the
allocation between Landlord and Tenant of the cost of certification shall be
final and conclusive.
3.02 Tenant's Proportionate share shall be 2.78%, the usable area
of the Leased Premises divided by the useable area of the Building, times 100,
computed as follows:
Premises Usable Area: 1325 = .278 x 100 = 2.78%
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Building Usable Area: 47,692 sq. ft.
3.03 All costs and expenses which Tenant assumes or agrees to pay
to Landlord under this Lease shall be deemed additional rent (which, together
with the Base Rent, is sometimes referred to as the "Rent"). The Rent shall be
paid to the Building manager (or other person) and at such place, as Landlord
may from time to time designate in writing, without any prior demand therefor
and without deduction or offset, in lawful money of the United States of
America.
3.04 In addition to the Rent and any other charges to be paid by
Tenant hereunder, Tenant shall reimburse Landlord upon demand for any and all
taxes payable by Landlord (other than net income taxes) which are not otherwise
reimbursable under this Lease, whether or not now customary or within the
contemplation of the parties, where such taxes are upon, measured by or
reasonably attributable to (a) the cost or value of Tenant's equipment,
furniture, fixtures and other personal property located in the Premises, or the
cost or value of any leasehold improvements made in or to the Premises by or for
Tenant, other than standard tenant improvements made by Landlord, regardless of
whether title to such improvements is held by Tenant or Landlord; (b) the gross
or net Rent payable under this Lease, including, without limitation, any rental
or gross receipts tax levied by any taxing authority with respect to the receipt
of the Rent hereunder; (c) the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; or (d) this transaction or any document to which Tenant is
a party creating or transferring an interest or an estate in the Premises. If
it becomes unlawful for Tenant to reimburse Landlord for any costs as required
under this Lease, the Base Rent shall be revised to net Landlord the same net
Rent after imposition of any tax or other charge upon Landlord as would have
been payable to Landlord but for the reimbursement being unlawful.
3.05 Landlord agrees to operate the Project in a prudent manner
with a view to controlling costs in a manner consistent with the sound operation
of the Project.
4. CONDITION OF THE PREMISES. Tenant's taking possession of the
Premises shall be deemed conclusive evidence that as of the date of taking
possession the Premises are in good order and satisfactory condition, except for
such matters as to which Tenant gave Landlord written notice on or before the
Commencement Date. No promise of Landlord to alter, remodel, repair or improve
the Premises or the Building and no representation, express or implied,
respecting any matter or thing relating to the Premises or Building or this
Lease (including, without limitation, the condition of the Premises or the
Building) have been made to Tenant by Landlord or its Broker or Sales Agent,
other than as may be contained herein or in a separate exhibit or addendum
signed by Landlord and Tenant.
5. TERM.
5.01 The lease term shall commence on the Commencement Date and
shall be for a period of 15 MONTHS ending September 30, 1999.
6. USE OF PREMISES. The Leased Premises may be used and occupied only
for offices and for no other purpose without Landlord's prior written consent.
Landlord does not represent nor warrant that the premises can be used for such
purpose, as it is incumbent upon Tenant to ascertain from the proper
governmental authorities whether or not the premises can be used for Tenant's
intended use. Tenant shall promptly comply with all laws, ordinances, orders
and regulations affecting the Leased Premises and their cleanliness, safety,
occupation and use. Tenant shall not commit, or suffer to be committed, any
waste on the Premises, nor shall Tenant maintain, commit, or permit the
maintenance or commission of any nuisance, as defined in California Civil Code
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Section 3479, on the Premises. This provision shall specifically preclude the
storage in or on the Premises, or release in or about the Premises, of hazardous
materials as that term is defined in Federal and California laws, statutes,
rules and regulations.
7. UTILITIES INTERRUPTION. Landlord shall not be liable in damages or
otherwise for any failure or interruption of any utility service, and no such
failure or interruption shall entitle Tenant to terminate this Lease or xxxxx
the rent and other charges.
8. ALTERATIONS, MECHANICS LIENS.
8.01 Alterations may not be made to the Leased Premises without
the prior written consent of Landlord and any alterations of the Leased Premises
except movable furniture and trade fixtures shall at Landlord's option become
part of the realty and belong to the Landlord.
9. FIRE INSURANCE HAZARDS.
9.01 No use shall be made or permitted to be made of the Leased
Premises, nor acts done, which will increase the existing rate of insurance upon
the Building or cause the cancellation of any insurance policy covering the
Building, or any part thereof, nor shall Tenant sell, or permit to be kept, used
or sold, in or about the Leased Premises, any article which may be prohibited by
the standard form of fire insurance policies. Tenant shall, at its sole cost
and expense, comply with any and all requirements pertaining to the Leased
Premises of any insurance organization or company, necessary for the maintenance
of reasonable fire and public liability insurance, covering the Leased Premises,
or the Building of which it is a part. Tenant agrees to pay to Landlord as
additional rent, any increase in premiums on policies which may be carried by
Landlord on the Leased Premises covering damages to the Building and loss of
rent caused by fire and the perils normally included in extended coverage above
the rates for the least hazardous type of occupancy for industrial, warehousing,
office and distribution operations.
9.02 Tenant shall maintain in full force and effect on all of its
fixtures and equipment in the Leased Premises a policy or policies of fire and
extended coverage insurance with malicious mischief and theft endorsements to
the extent of at least eighty percent (80%) of their insurable value. During
the term of this Lease the proceeds from any such policy or policies of
insurance shall be used for the repair or replacement of the fixtures and
equipment so insured. Landlord shall have no interest in the insurance upon
Tenant's equipment ad fixtures and will sign all documents necessary or proper
in connection with the settlement of any claim or loss by Tenant. Landlord will
not carry insurance on Tenant's possessions, nor on any leasehold improvements
made by Tenant. Tenant shall furnish Landlord with a certificate of such policy
within thirty (30) days of the commencement of this Lease and whenever required
shall satisfy Landlord that such policy is in full force and effect.
10. LIABILITY INSURANCE. Tenant, commencing upon Tenant's initial
entry into the premises, at its own expense, shall provide and keep in force
with companies acceptable to Landlord public liability insurance for the benefit
of Landlord and Tenant jointly against liability for bodily injury and property
damage in the amount of not less than One Million Dollars ($1,000,000) in
respect to injuries to or death of one person and in an amount of not less than
Two Million Dollars ($2,000,000) in respect to injuries to or death of more than
one person in any one occurrence, and in the amount of not less than Four
Hundred Ninety-Five Thousand Dollars ($495,000) per occurrence in respect to
damage to property, such limits to be in any greater amounts as may be
reasonably indicated by circumstances from time to time existing. Tenant shall
upon occupancy furnish Landlord with a certificate of such policy and whenever
required shall satisfy Landlord that such policy is in full force and effect.
Such policy shall name Landlord as an additional insured and shall be primary
and non-contributing with any insurance carried by Landlord. The policy shall
further provide that it shall not be canceled or altered without twenty (20)
days' prior written notice to Landlord. Insurance required hereunder shall be
in companies rated A+, AAA or better in "Best's Insurance Guide."
11. INDEMNIFICATION BY TENANT.
11.01 This Lease is made on the express condition that Landlord shall
not be liable for or suffer loss by reason of injury to person or property from
any cause (excluding Landlord's negligent act or omission and excluding any
environmental matters not caused by Tenant) in any way connected with the
condition or use of the Leased Premises or the installation or construction of
improvements or personal property therein, including without limitation any
liability for injury to the person or property of Tenant, its agents, officers,
employees or invitees. Tenant agrees to indemnify Landlord and hold it harmless
from any and all liability, loss, cost, or obligation on account of, or arising
out of, any such injury or loss.
11.02 In case any action, suit or proceeding is brought against
Landlord by reason of any such occurrence, under the paragraph above, Tenant,
upon Landlord's request, will at Tenant's expense, resist and defend such
action, suit or proceeding, or cause the same to be resisted and defended by
counsel designated by the insurer whose policy covers the occurrence or by
counsel designated by Tenant and approved by Landlord. The obligations of
Tenant under this section arising by reason of any occurrence taking place
during the Lease Term shall survive any termination of this Lease.
12. REPAIRS.
12.01 Tenant shall, at Tenant's sole cost and expense, keep the
Premises and every part thereof in good condition and repair (except as
hereinafter provided with respect to Landlord's obligations) including without
limitation, the maintenance, replacement and repair of any storefront, doors,
window casements and glazing. Tenant shall, upon the expiration or sooner
termina-tion of this Lease hereof, surrender the Leased Premises to the Landlord
in good condition, broom clean, ordinary wear and tear and damage from causes
beyond the reasonable control of Tenant excepted. Any damage to adjacent
premises caused by Tenant's use of the Premises shall be repaired at the sole
cost and expense of Tenant.
12.02 Notwithstanding the Provisions of Paragraph 12.01 hereinabove,
Landlord shall repair and maintain the structural portions of the Leased
Premises, including the exterior walls and roof, plumbing, pipes, electrical
wiring and conduits, unless such maintenance and repairs are caused in part or
in whole by the act, neglect, fault or omission of any duty by the Tenant, its
agents, servants, employees, invitees, or any damage caused by breaking and
entering, in which case Tenant shall pay to Landlord the reasonable cost of such
maintenance and repairs. All costs and expenses of Landlord under this
Paragraph 12.02 shall be Project Operating Costs under Paragraph 3.01. Landlord
shall not be liable for any failure to make any such repairs or to perform any
maintenance unless such failure shall persist for an unreasonable time after
written notice of the need of such repairs or maintenance is given to Landlord
by Tenant. Except as provided in Article 16 hereof, there shall be no abatement
of rent and no liability of Landlord by reason of any injury to or interference
with Tenant's business arising from the making of any repairs, alterations or
improvements in or to any portion of the Leased Premises or building of which
the Leased Premises are a part, or in or to fixtures, appurtenances and
equipment therein. Tenant waives the right to make repairs at Landlord's
expense under any law, statute or ordinance now or hereafter in effect.
13. PARKING AND COMMON AREAS. Tenant, for the use and benefit of
Tenant, its agents, employees, customers, licensees and subtenants, shall have
the non-exclusive right in common with Landlord, and other present and future
owners, tenants and their agents, employees, customers, licensees and
subtenants, to use the Common areas and parking garage adjacent to the building
during the entire term of this Lease, for ingress and egress, and automobile
parking.
14. SIGNS. The Tenant shall obtain Landlord's approval before signs
are placed on the exterior and/or interior of the Building.
15. ENTRY BY LANDLORD. Tenant shall permit Landlord and Landlord's
agents to enter the Leased Premises after business hours on weekdays, and on
weekends, for the purpose of inspecting the same or for the purpose of
maintaining the Leased Premises or adjacent premises or for the purpose of
making repairs, altera-tions, or additions to any portion of same including the
erection and maintenance of such scaffolding, canopies, fences, and props as may
be required, or for the purpose of posting notices of non-responsibility for
alterations, additions, or repairs without any rebate of rent and without any
liability to Tenant for any loss of occupation or quiet enjoyment of the Leased
Premises thereby occasioned. For each of the aforesaid purposes, Landlord shall
at all times have and retain a key with which to unlock all of the doors in,
upon and about the Leased Premises, excluding Tenant's vaults and safes. The
tenant shall not alter any lock or install a new or additional lock or any bolt
on any door of the Leased Premises without prior written consent of the
Landlord. If Landlord shall give its consent, the Tenant shall in each case
furnish the Landlord with a key for any such lock.
16. DESTRUCTION OR DAMAGE.
16.01 If the Premises or the portion of the Building necessary for
Tenant's occupancy is damaged by fire, earthquake, act of God, the elements or
other casualty, Landlord shall, subject to the provisions of this Article,
promptly repair the damage, if such repairs can, in Landlord's opinion, be
completed within (90) ninety days. If Landlord determines that repairs can be
completed within ninety (90) days, this Lease shall remain in full force and
effect, except that if such damage is not the result of the negligence or
willful misconduct of Tenant or Tenant's agents, employees, contractors,
licensees or invitees, the Base Rent shall be abated to the extent Tenant's use
of the Premises is impaired, commencing with the date of damage and continuing
until completion of the repairs required of Landlord under Paragraph 16.04.
16.02. If in Landlord's opinion, such repairs to the Premises or
portion of the Building necessary for Tenant's occupancy cannot be completed
within ninety (90) days, Landlord shall notify Tenant of that opinion in writing
within thirty (30) days after the date of such fire or other casualty. In such
event, Landlord and Tenant may each terminate this Lease unilaterally by giving
the other party written notice of such termination within 15 days of the
effective date of the notice described above, and this Lease shall terminate as
of the date of such fire or casualty. If neither party notifies the other of
such termination, this Lease shall continue in full force and effect, but the
Base Rent shall be partially abated as provided in Paragraph 16.01.
16.03(a) If any other portion of the Building or Project is totally
destroyed or damaged to the extent that in Landlord's opinion repair thereof
cannot be completed within ninety (90) days, Landlord may elect upon notice to
Tenant given within thirty (30) days after the date of such fire or other
casualty, to repair such damage, in which event this Lease shall continue in
full force and effect, but the Base Rent shall be partially abated as provided
in Paragraph 16.01. If Landlord does not elect to make such repairs, this Lease
shall terminate as of the date of such fire or other casualty.
16.03(b) If any other such portion of the Building or Project is
totally destroyed or damaged to the extent that in Landlord's opinion repair
thereof cannot be completed within ninety (90) days, and Tenant's business
operations are substantially and adversely impacted by such damage, and Landlord
elects to repair such damage, then, nevertheless, Tenant shall have the right to
terminate this Lease if the substantial adverse impact is not cured by Landlord
within one hundred fifty (150) days of the date of such fire or casualty.
Tenant shall exercise this right by giving written notice to Landlord no later
than one hundred fifty-five (155) days after the date of such fire or casualty.
16.04 If the Premises are to be repaired under this Article, Landlord
shall repair at its cost any injury or damage to the Building and standard
tenant improvements in the Premises. Tenant shall be responsible at its sole
cost and expense for the repair, restoration and replacement of any other
Leasehold improvements and Tenant's Property. Landlord shall not be liable for
any loss of business, inconvenience or annoyance arising from any repair or
restoration of any portion of the Premises or Building as a result of any damage
from fire or other casualty.
16.05 This Lease shall be considered an express agreement governing any
case of damage to or destruction of the Premises or Building by fire or other
casualty, and any present or future law which purports to govern the rights of
Landlord and Tenant in such circumstances in the absence of express agreement,
shall have no application. The opinions and determinations of Landlord under
this Section 16 shall be reasonable.
17. ASSIGNMENT AND SUBLETTING. Tenant shall not either voluntarily, or
by operation of law, assign, transfer, mortgage, pledge, hypothecate or encumber
this Lease or any interest therein, and shall not sublet the Leased Premises or
any part thereof, or any right or privilege appurtenant thereto, or allow any
other person (the employees, agents, servants and invitees or Tenant excepted)
to occupy or use the Leased Premises, or any portion thereof, without the
written consent of Landlord first had and obtained, which consent shall not be
unreasonably withheld. A consent to one assignment, subletting, occupation or
use by any other person shall not be deemed to be a consent to any subsequent
assignment, subletting, occupation or use by another persona. Consent to any
such assignment or subletting shall not relieve Tenant of any liability under
this Lease. Any such assignment or subletting without such consent shall be
void, and shall, at the option of the Landlord, constitute a default under the
terms of this Lease.
In the event that Landlord shall consent to a sublease or assignment
hereunder, Tenant shall pay Landlord reasonable fees, not to exceed One Thousand
Dollars ($1,000.00), incurred in connection with the processing of documents
necessary to giving of such consent and assumption by the assignee.
18. TENANT'S DEFAULT. The occurrence of any one or more of the
following events shall constitute a default and breach of this Lease by Tenant:
A. The vacating or abandonment of the Premises by Tenant.
B. The failure by Tenant to make any payment or rent or any other
payment required to be made by Tenant hereunder, as and when due.
C. The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by the
Tenant, other than described in B, above, where such failure shall continue for
a period of fifteen (15) days after written notice thereof by Landlord to
Tenant; provided, however, that if the nature of Tenant's default is such that
more than fifteen (15) days are reasonably required for its cure, then Tenant
shall not be deemed to be in default if Tenant commences such cure within said
fifteen (15) days period and thereafter diligently prosecutes such cure to
completion.
D. The making by Tenant of any general assignment or general
arrangement for the benefit of creditors; or the filing by or against Tenant of
a petition to have Tenant adjudged a bankrupt, or a petition or reorganization
or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days); or
the appointment of a trustee or a receiver to take possession of substantially
all of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within thirty (30) days; or
the attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Leased Premises or of Tenant's interest in this
Lease, where such seizure is not discharged in thirty (30) days.
19. REMEDIES ON DEFAULT. In the event of any such default or breach by
Tenant, Landlord may at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of a right or remedy which
Landlord may have by reason of such default or breach:
A. Terminate Tenant's right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Premises to Landlord. In such event Landlord shall
be entitled to recover from Tenant all damages incurred by Landlord by reason of
Tenant's default including, but not limited to: the cost of recovering
possession of the Premises; expenses of reletting, including necessary
renovation and alteration of the Premises; reasonable attorney's fees; the worth
at the time of award by the court having jurisdiction thereof of the amount by
which the unpaid rent and other charges and adjustments called for herein for
the balance of the term after the time of such award exceeds the amount of such
loss for the same period that Tenant proves could be reasonably avoided; and
that portion of the tenant improvements installed by the Landlord for the Tenant
& applicable to the unexpired term of this lease; and that portion of any
leasing commission paid by Landlord and applicable to the unexpired term of this
Lease. Unpaid installments of rent or other sums shall bear interest from the
date due at the rate of ten percent (10%) per annum. "Worth" as used in this
provision, is computed by discount-ing the total at the discount rate of the
Federal Reserve Bank of San Francisco at the time of the judgment, or award,
plus one percent (1%).
B. Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event, Landlord shall be entitled to enforce all of
Landlord's rights and remedies under this Lease, including the right to recover
the rent and any other charges and adjustments as may become due hereunder; or
C. Pursue any other remedy now or hereafter available to Landlord under
the laws or judicial decisions of the State in which the Premises are located.
20. LANDLORD'S RIGHT TO CURE DEFAULTS. Landlord may, but shall not be
obligated to, cure, any anytime, without notice, any default by Tenant under
this Lease; and whenever Landlord so elects, all costs and expenses incurred by
Landlord including without limitation reasonable attorney's fees and expenses,
together with interest on the amount of costs and expenses so incurred at the
maximum legal rate then in effect in the State of California shall be paid by
Tenant to Landlord on demand.
21. DEFAULT BY LANDLORD. Landlord shall not be in default unless
Landlord or the beneficiary under any deed of trust fails to perform obligations
required of Landlord within a reasonable time, but in no event later than thirty
(30) days after written notice by Tenant to Landlord and to the beneficiary of
any deed of trust covering the Premises whose name and address shall have
theretofore been furnished to Tenant in writing, specifying wherein Landlord has
failed to perform such obligation; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are required for
performance, then Landlord shall not be in default if Landlord or said
beneficiary commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion. In no event shall
Tenant have the right to terminate this Lease as a result of Landlord's default
and Tenant's remedies shall be limited to damages and/or an injunction.
22. ATTORNEY'S FEES/COLLECTION CHARGES. In the event of any legal
action or proceeding between the parties hereto, reasonable attorney's fees and
expenses of the prevailing party in any such action or proceeding may be added
to the judgment therein, including attorney's fees on appeal. In addition to
the charges provided for above, Tenant shall pay a charge of $25.00 to Landlord
for preparation of each demand for delinquent rent.
23. SURRENDER OF LEASE NOT MERGER. The voluntary or other surrender of
this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger,
and shall, at the option of Landlord terminate all or any existing subleases,
and/or subtenan-cies, or may, at the option of Landlord, operate as an
assignment to it of any or all of such subleases or subtenancies.
24. CONDEMNATION. If any part of the Leased Premises or the
building of which it is a part, or the Center or parking or common areas
therein, shall be taken or condemned for a public or quasi-public use, and a
part thereof remains which is reasonably suitable for Tenant's purposes
hereunder, this Lease shall, as to the part so taken, terminate as of the date
title shall vest in the condemnor, and the rent payable hereunder shall be
equitably adjusted. If all the Leased Premises, or such part thereof be taken
or condemned so that there does not remain a portion reasonably suitable for
Tenant's purposes hereunder, this Lease shall thereupon terminate.
25. WAIVER. The waiver by Landlord of any breach of any term,
covenant, or condition herein contained shall not be deemed to be a waiver of
such term, covenant, or condition or any subsequent breach of the same or any
other term, covenant, or condition herein contained. The subsequent acceptance
of rent hereunder by Landlord shall not be deemed to be a waiver of any
preceding breach by Tenant of any term, covenant, or condition of this Lease,
other than the failure of Tenant to pay the particular rental so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.
26. EFFECT OF HOLDING OVER. If Tenant should remain in possession
of the Leased Premises after the expiration of the Lease Term and without
executing a new Lease, then such holding over shall be construed as a tenancy
from month-to-month, subject to all the conditions, provisions, and obligations
of this Lease insofar as the same are applicable to a month-to-month tenancy;
provided, however, that Base Rent during any such holding over shall be 150% of
the Base Rent in effect immediately prior to the expiration of the Lease term.
27. TENANT'S STATEMENT. Tenant shall at any time and from time to
time upon not less than five (5) days prior written notice from Landlord
execute, acknowledge and deliver to Landlord a statement in writing (a)
certifying that this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification and certifying that this Lease
as so modified is in full force and effect), and the date to which the rental
and +other charges are paid in advance, if any, and (b) acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of the Landlord
hereunder, or specifying such defaults if any are claimed, and (c) setting forth
the date of commencement of rents and expiration of the term hereof. Any such
statement may be relied upon by any prospective purchaser or encumbrancer of all
or any portion of the real property of which the Premises are a part.
28. TENANT'S FINANCIAL INFORMATION. Tenant shall promptly furnish
to Landlord, from time to time, financial statements and annual reports,
reflecting Tenant's current financial condition, whenever requested by Landlord.
29. RELATIONSHIP OF THE PARTIES. Nothing contained herein shall be
deemed or construed by the parties hereto nor by any third party, as creating
the relationship of principal and agent or of partnership or of joint venture
between the parties hereto, it being understood and agreed that neither the
method of computation of rent nor any other provision contained herein, nor any
acts of the parties hereto, shall be deemed to create any relationship other
than Landlord and Tenant.
30. RULES AND REGULATIONS. Tenant shall faithfully observe and
comply with all reasonable rules and regulations that Landlord shall from time
to time promulgate and/or modify (see Exhibit "C" attached hereto). The rules
and regulations shall be binding upon the Tenant upon delivery of a copy of them
to Tenant. Landlord shall not be responsible to Tenant for the nonperformance
of any said rules and regulations by any other tenants or occupants. Said rules
may include (1) the restricting of employee parking, and (2) regulation of waste
removal.
31. GENERAL PROVISIONS.
31.01 Plats and Riders. Clauses, plats, riders and addendums, if any,
------------------
affixed to this Lease are a part hereof.
31.02 Venue. Landlord will execute this Lease and will receive the
------
rent and other payments at Landlord's office. Therefore the county in which
Landlord's office is located is hereby deemed to be a proper place of venue for
transitory actions.
31.03 Marginal Headings. The marginal headings and article titles to
-------------------
the articles of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpreta-tion of any part hereof.
31.04 Time. Time is of the essence of this Lease and each and all of
-----
its provisions in which performance is a factor.
31.05. Successors and Assigns. The covenants and condi-tions herein
-------------------------
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
31.06. Recordation. Neither Landlord nor Tenant shall record this
------------
Lease, but a short form memorandum hereof may be recorded at the request of the
Landlord.
31.07. Quiet Possession. Upon Tenant paying the rent reserved
------------------
hereunder and observing and performing all of the covenants, conditions and
provisions on Tenant's part to be observed and performed hereunder, Tenant shall
have quiet posses-sion of the Premises for the entire term hereof, subject to
all the provisions of this Lease.
31.08. Prior Agreements. This Lease contains all of the agreements of
------------------
the parties hereto with respect to any matter covered or mentioned in this
Lease, and no prior agreements or understand-ing pertaining to any such matter
shall be effective for any purpose. No provision of this Lease may be amended
or added to except by an agreement in writing signed by the parties hereto or
their respective successors in interest. This Lease shall not be effective or
binding on any party until fully executed by both parties hereto.
31.09. Inability to Perform. This lease and the obliga-tions of the
----------------------
Tenant hereunder shall not be affected or impaired because the Landlord is
unable to fulfill any of its obligations hereunder or is delayed in doing so, if
such inability or delay is caused by reason of strike, labor troubles, acts of
God, or any other cause beyond the reasonable control of the Landlord.
31.10. Partial Invalidity. Any provision of this Lease which shall
--------------------
prove to be invalid, void, or illegal shall in no way affect,impair or
invalidate any other provisions hereof and such other provision shall remain in
full force and effect.
31.11. Cumulative Remedies. No remedy or election hereunder shall be
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deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
31.12. Choice of Law. This Lease shall be governed by the laws of the
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State of California.
31.13. Sale of Premises by Landlord. In the event of any sale of the
-------------------------------
Premises by Landlord, Landlord shall be and is hereby entirely freed and
relieved of all liability under any and all of its covenants and obligations
contained in or derived from this Lease arising out of any act, occurrence or
omission occurring after the consummation of such sale; but only if the
purchaser at such sale or any subsequent sale of the Premises shall have assumed
and agreed to carry out any and all of the covenants and obliga-tions of the
Landlord under this Lease.
31.14. Subordination, Attornment. Upon request of the Landlord, Tenant
--------------------------
will in writing subordinate its rights hereunder to the lien of any mortgage, or
deed of trust, to any bank, insurance company or other lender (including the
Building owner and its successors and assigns) now or hereafter in force against
the premises, and to all advances made or hereafter to be made upon the security
thereof, provided that such company or institution agrees to honor this Lease
for the full term hereof so long as Tenant is not in default hereunder.
In the event any proceedings are brought for foreclosure, or in the event
of the exercise of the power of sale under any mortgage or deed of trust made by
the Landlord covering the Premises, the Tenant shall attorn to the purchaser
upon any such foreclosure or sale and recognize such purchaser as the Landlord
under this Lease.
31.15. Notices. All notices and demands which may be or are required
--------
or permitted to be given by either party on the other hereunder shall be in
writing. All notices and demands by the Landlord to the Tenant shall be sent by
United States Mail, postage prepaid, addressed to the Tenant at the Premises,
and to the address hereinbelow, or to such other place as Tenant may from time
to time designate in a notice to the Landlord. All notices and demands by the
Tenant to the Landlord shall be sent by United States Mail, postage prepaid,
addressed to the Landlord at the address set forth herein, and to such other
person or place as the Landlord may from time to time designate in a notice to
the Tenant.
To Landlord at: NINE C CORPORATION
000 Xxxxxxxx Xxxx. #000
Xxxxxxx Xxxx, XX 00000
To Tenant at: Penn Octane Corporation
000 Xxxxxxxx Xxxx. #000
Xxxxxxx Xxxx, XX 00000
32. SERVICES TO PREMISES. Notwithstanding anything herein to the
contrary, the Landlord shall provide water, power, heating, air conditioning,
janitorial and other services, including but not limited to floor waxing, trash
removal, window washing and all facilities regarding maintenance of the exterior
of the building, including gardening, subject to payment or reimbursement by
Tenant as provided herein.
Exhibit "B" hereto more completely sets forth the types and frequency of
service and the minimum acceptable service standard levels.
33. VALIDITY OF LEASE. The Lease shall be effective only after
Tenant has received a fully executed copy of this Lease from Landlord.
34. TOXIC/HAZARDOUS MATERIALS CONSIDERATION. Upon request Lessor will
make available a Toxic Report that shows Benzene under the garage area. This is
being monitored by the County Health Department at this time. Lessor believes
it does not present a hazard.
THE PARTIES HAVE EXECUTED THIS LEASE THE DATE AND YEAR SET BELOW THEIR
SIGNATURE:
LANDLORD TENANT
-------- ------
NINE-C CORPORATION PENN OCTANE CORPORATION
By:____________________________ By:____________________________
Xxxxx X. Xxxxxx X. X. Xxxxxxx
Title: President Title: Principal -
Date:__________________________ Date:__________________________
By:___________________________
X.X. Xxxxxxx, an individual
Address:
Date:
